Federal Reserve is also known as Federal Reserve System or Fed. It is United States’ central banking system. It conducts nation’s monetary policy, supervises and regulates banking institutions, maintains stability of financial system and is a major operator in the nation’s payments systems.
Federal Reserve is not owned by anyone and hence is subject to the Administrative Procedure Act. So, it is legally obligated to inform the masses, about the rulemaking and adjudication. Hence the flow of funds accounts of US for third quarter 2009 is as follows.
The debt of domestic sectors which are nonfinancial is estimated to have gone up at a seasonally adjusted annual rate of 2 ¾ percent in the third quarter of 2009. This is around 1 ¾ percent points slower than the data in the second quarter. The third quarter showed contraction in private debt and expansion in government debt. The third quarter also saw a contraction for household debt at an annual rate of 2 ½ percent. This is its fifth consecutive quarter of decline and the largest decrease recorded.
Home mortgage debt contracted at an annual rate 3 ½ while consumer credit fell at an annual rate of 3 ¼ percent. Besides these other components of household debt expanded in the third quarter.
Non-financial debt, in the third quarter, fell at an annual rate of 2 ½ percent. This decline was widespread across the credit market instrument. Government debt continued its growth in the third quarter as well. State and local government debt expanded at 5% annual rate. This rise was around 1 ½ percentage points faster as compared to the second quarter. Federal Government debt was somewhat slower as compared to the second quarter, which expanded at an annual rate of 21%. This was the fifth consecutive quarter of growth with 20% and more.
Summing up the statistics at the end of third quarter of 2009, the level of domestic outstanding non-financial debt was $34.6 trillion, non-financial business debt was $11.1 trillion, household debt was $ 13.6 trillion and total government debt was $9.9 trillion. The difference between the value of assets and liabilities- Household net worth was around $ 53.4 trillion. This was a 5% increase from the second quarter marking the second consecutive quarter of growth.
